Higher Taxes Reduce Cigarette Sales In Indiana

The Indiana Department of Health says an increase in the state’s cigarette tax is responsible for a significant decrease in cigarette purchases, but it’s not clear just how many Hoosiers have quit smoking because of the hike.

The 18 percent sales decline was reported after the cigarette tax increased to nearly one dollar per pack in July.

“If you look at all the states that have increased their cigarette tax, this is pretty much the pattern that you see,” she says.

But Sheree Banet, who owns Smokey’s Discount Tobacco in Jeffersonville says many of her customers are buying their cigarettes across the river, where they’re cheaper.

“What happened was, the people in Indiana are going to Kentucky, so we’ve lost those sales,” says Banet. The people in Michigan, Ohio and Illinois are no longer coming in our state to buy, cause we’re so high, so we’ve lost all those sales.”